Luxury condos put up for auction
The stagnant real estate market is hitting even the most desirable places to live in the state, prompting one developer to offer what may be the first condominium real estate auction in this area.
Twenty-five new luxury homes in Concord will go to the highest bidders at a public auction on May 10 at the Westin Waltham Boston in Waltham. The minimum bid for the units at Concord Commons will be $290,000, well below the current asking price of $519,000.
"Given the market conditions, it gives us an opportunity to sell units on a large scale and saves us from carrying costs," said Matthew Blackham, project analyst for Tambone Investment Group of Burlington, which developed Concord Commons with Boynton Co. of Concord. "And it puts discounts in the buyer's hands."
The auction is being held by Accelerated Marketing Partners, a Boston firm that specializes in real estate auctions.
Concord Commons on Conant Street in West Concord features two- and three-bedroom homes with upscale kitchens including high-quality appliances, hardwood floors, private exterior balconies, and gas fireplaces. The 21 two-bedroom residences to auctioned range in size from 1,212 square feet to 1,890 square feet.
The auction will also offer four three-bedroom residences that range in size from 1,469 square feet to 2,223 square feet for a minimum bid of $385,000. Two- and three-bedroom homes had previous asking prices of up to $779,000.
Some units in the 58-unit complex were sold before construction, which was completed last May. Sales had been strong but have slowed significantly in the past four to five months, Blackham said.
Laurie Cadigan, owner of Barrett & Co., the listing company for Concord Commons, said Concord does not have a large market of high-end condominiums, so it has been difficult to set a selling price that isn't too high or too low.
She said the auction will help do that.
"What the developer is hoping to do is establish a real price point for the units," she said.
Jon Gollinger, chief executive officer of Accelerated Marking Partners, said the prices will go up only as high as the bidders allow them to.
"It's a transparent process," he said. "We put a minimum price that is preposterously low and hope the market gives us something we can live with."
If it works, the developer will sell a significant number of units and rid itself of carrying costs such as mortgages, taxes, and condo and brokerage fees. But there is also a risk that the units sell at a price less than expected or not at all.
Blackham said it's a win-win for the buyers. The question is whether it will be a success for the developers.
"The minimum bids are significantly reduced, so if someone is in the market they'd be crazy not to show up and bid," Blackham said.
Gollinger said this is the first auction of new construction in Boston's western suburbs. He said home prices went up too high, too fast in recent years and now have to find a middle ground. He said homes that are selling are priced aggressively low, but many people still are not willing to go low enough.
"Nothing is permanent in life," Gollinger said. "You can't hold on to appreciation or a price depreciation. They are cyclical."
While the auction may be unique to this area, such tactics are more common in urban parts of the state. Accelerated Marketing has conducted several auctions in Boston and most recently in Revere.
Gollinger said sometimes it takes an auction to help set a floor and spur some movement in the market.
"The only thing that is stopping people from purchasing is they don't believe the prices have stopped going down. So choose your bid," Gollinger said. "It creates a confidence in the marketplace. It starts going, 'Ah, there is a price point at which things sell.' The challenge is to find it."
And once that price is set, Cadigan hopes it will spur movement elsewhere in the market.
"It will create a little bit of momentum, which any market could use right now," she said. "It will create some excitement because people who could not otherwise afford this kind of square footage will have an opportunity."
For more information about the auction, call 978-369-7500. The website for Concord Commons is concordcommons.net.
Jennifer Fenn Lefferts can be reached at jflefferts@yahoo.com.
Correction: Because of a reporting error, the name of Jon Gollinger, chief executive officer of Accelerated Marketing Partners, was misspelled in a story last Thursday about a Concord condominium auction.
